OCP group case

Use your bookmarked Harvard Business Publishing link to access this case study.CASE: OCP Group case (HBS 9-718-002)
Critically analyze the key elements of the case and write an in-depth case analysis report
addressing the following questions:
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Discuss OCP’s strategy as a state-owned enterprise prior to Dr. Terrab’s arrival.
How did OCP change its strategy after Dr. Terrab became CEO? Discuss how it
balanced low cost and differentiation.
How is OCP managing geographic diversification? Assess the risks of its
diversification moves.
Discuss OCP’s strategy for Africa. What will it take to succeed?
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Briefly summarize the situation facing the business in the case.
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2. Analysis:
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Thoroughly analyze the situation using relevant frameworks and concepts.
Use the facts from the case to support your analysis.
3. Recommendation:
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Identify the alternative courses of action the company can take to solve its problem
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State your choice for the best course of action and provide a detailed explanation
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A 3–5-page written case analysis report with supporting exhibits (double-spaced,
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exhibit. If you are performing calculations on data, use a footnote to indicate how
you are performing the calculations.
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9 -7 1 8 -0 0 2
REV: DECEMBER 14, 2018
KRISTIN FABBE
FOREST REINHARDT
NATALIE KINDRED
ALPANA THAPAR
OCP Group
In 1920, following the discovery of phosphate deposits in Morocco, the French protectorate
established the Office Chérifien des Phosphates as the state agency with a monopoly in Morocco over
exploiting this precious resource: converted from its mined form as phosphate rock into phosphorus,
it was a vital macronutrient for plant growth, along with nitrogen and potassium. The value of
Morocco’s phosphate reserves grew more apparent over the 20th century, as the Haber-Bosch process,
which enabled the conversion of atmospheric nitrogen into a form useful for crops, led to a vast increase
in the worldwide use of synthetic fertilizer. Phosphorus was a finite resource, with the economically
accessible parts found only in certain locations around the world. Morocco held about 75% of global
phosphate reserves, or 50 billion metric tons (MT). 1 China, with the second-largest reserves, held about
6% of the global total. 2
For nearly a century, the Office Chérifien des Phosphates, eventually renamed OCP Group (OCP),
operated as a state agency, with structural constraints and, at times, a lack of agility. With production
volume and operational stability as its main priorities, OCP established itself as a leading low-cost
producer and exporter of phosphate rock and phosphoric acid. But with minimal downstream
participation in the value chain, OCP was capturing only a portion of the potential value of Morocco’s
phosphate reserves.
OCP’s direction changed in 2006 with the arrival of a new Chairman and CEO, Dr. Mostafa Terrab.
He converted OCP into a joint-stock company, with the state as its main (95%) shareholder, and set out
a vision of transformation backed by a 20-year, $20 billion capital expenditure program. The goals were
to increase production and processing capacity, decrease production costs, strengthen fertilizermanufacturing capabilities, and make a concerted turn toward unlocking—and fulfilling—fertilizer
demand in underserved African markets. By 2017, OCP had made huge progress, having increased its
mining capacity from 30 million MT to 44 million MT of phosphate rock; expanded its downstream
production from 4 million MT to 12 million MT of fertilizer; and decreased its rock production costs
from $34 per MT in 2013 to less than $20 per MT in Khouribga, its largest mine. OCP’s financial
performance had also improved dramatically: as Marouane Ameziane, Executive Vice President of
Strategy and Corporate Development, noted, “For 20 years we had annual revenue of about $1.5 billion.
Now that’s roughly our EBITDA.” (See Exhibits 1–3 for financials and output.)
Professors Kristin Fabbe and Forest Reinhardt, Agribusiness Senior Researcher Natalie Kindred, and Assistant Director Alpana Thapar (Middle
East and North Africa Region) prepared this case. The company facts were reviewed and approved before publication by a company designate.
Funding for the development of this case was provided by Harvard Business School and not by the company. HBS cases are developed solely as
the basis for class discussion. Cases are not intended to serve as endorsements, sources of primary data, or illustrations of effective or ineffective
management.
Copyright © 2017, 2018 President and Fellows of Harvard College. To order copies or request permission to reproduce materials, call 1-800-5457685, write Harvard Business School Publishing, Boston, MA 02163, or go to www.hbsp.harvard.edu. This publication may not be digitized,
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718-002
OCP Group
In late 2017, having completed the first phase of the investment program, Terrab and the leadership
team had an opportunity to reflect on the firm’s strategy. Was OCP better off focusing entirely on its
competitive advantages as a large-scale, low-cost producer? Or was downstream diversification, local
product customization, and a more aggressive focus on Africa the best way to leverage Morocco’s most
important strategic resource: its unmatched phosphate rock reserves?
The Kingdom of Morocco
The Kingdom of Morocco had a strategically advantageous location in the northwest corner of
Africa, about 14 kilometers (km) from Spain across the Strait of Gibraltar. 3 Africa’s only country with
both Atlantic and Mediterranean coastline, Morocco covered an area of 711,000 square km, including
the Western Sahara region in its south. 4 (See Exhibit 4 for a map.) The landscape varied from the
mountainous north coast and interior to fertile coastal plains to dry desert. 5 Temperatures tended to
be warm on the coast and hot inland. The capital, Rabat, on the upper Atlantic coast, saw temperatures
from a high of about 28º Celsius (82.4º Fahrenheit) in August to a low of 8º Celsius (46.4º Fahrenheit)
in January. Rainfall swung from an average of 1 millimeter (mm) in July to 86 mm in December. 6
Roughly 60% of Morocco’s population of 33.7 million lived in urban areas, including 3.5 million in
the largest city, Casablanca, and 2 million in Rabat. 7 Although Morocco’s official languages included
Arabic and Tamazight (a Berber language), French was commonly spoken in business, government,
and diplomatic circles—the legacy of French colonial rule, from which Morocco gained independence
in 1956. 8 Spanish was often spoken in the north. Moroccans were almost entirely of the Arab-Berber
ethnicity and Sunni Muslim faith. 9 The rate of population growth, at 1% in 2016, was declining due to
factors such as greater education access for females, delayed marriage, and increased contraceptive
use; the total fertility rate declined from 5 births per woman in the mid-1980s to 2.2 in 2010. 10 However,
the female labor-market participation rate, at about 25%, remained in the lowest 20% of countries
worldwide. 11
Morocco was a parliamentary constitutional monarchy, with King Mohammed VI serving as Head
of State and the most powerful political figure, and Prime Minister Saadeddine Othmani as head of
government. Its legal system derived from a blend of French and Islamic law. In 2011, amid growing
popular demands for political and social reforms in Morocco and the broader region, the country
revised its constitution and introduced reforms aimed at modernizing institutions, promoting
decentralization of authority, and enabling a more democratic society. 12 The country was considered
stable, though high unemployment, income inequality and rural poverty, and Morocco’s position as a
transit point for Europe-bound migrants were sources of tension. 13 In addition, international
disagreement about Morocco’s territorial claim over Western Sahara bred friction: it underpinned the
2015 suspension of a bilateral agriculture and fisheries accord with the European Union, for example,
as well as Morocco’s break from the African Union’s predecessor organization in 1984. (Morocco
rejoined the African Union in January 2017.) 14 Furthermore, Morocco’s largest land border, with
Algeria, had been closed since 1994 as a result of a terrorist attack in Marrakesh that Moroccan officials
suspected to be Algerian inspired. Despite these challenges, many foreign governments and firms
viewed Morocco as a key beacon of economic development and security in the region, especially given
the country’s comparative stability in the wake of the 2011 “Arab Spring” uprisings. 15
Morocco saw average GDP growth from 2010 to 2015 of 4% before it fell to 1.5% in 2016 due to lower
agricultural production as well as slowing export demand in some key near-region markets and China
(see Exhibit 5 for GDP trends). 16 GDP was $98.6 billion in 2016, or $8,110 per capita at purchasing
power parity. 17 While Morocco had benefited from the recent domestic expansion of industries such
2
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OCP Group
718-002
as automobiles, aeronautics, and electronics, wealth distribution was highly unequal. (See Exhibit 6 for
relevant country data from Morocco and other markets.) About 19% of rural Moroccans were poor or
vulnerable. 18 Overall unemployment was reported at 9%, with higher levels for young adults and
nearly 39% unemployment among urban youth. 19 Most new job creation was in the informal sector. 20
The poor quality of education accessible to most Moroccans contributed to systemic inequalities.
Roughly a third of Moroccans were illiterate, and only about one-fifth of 10-years-olds had basic
reading skills. A 2017 World Bank report noted that “the average number of years of education
calculated for the population aged 25 and over stood at 4.4 years in 2013, well below the world average
of 7.7 years and the average for the Arab countries of 6.3 years, and close to the 4.1 years reported for
the low human development countries.” 21 However, many upper-income Moroccans sent their
children to high-quality education programs in Morocco or often in France. Historically, many welleducated Moroccans had pursued job opportunities overseas, but they were increasingly returning to
Morocco, lured by the country’s expanding economy.
Morocco maintained close ties with Europe, which in 2015 accounted for 47% of its exports. Spain
was its top market for goods exports (23% of value), followed by France (20%), Italy (4%), India (4%),
and the U.S. (3.5%). 22 (See Exhibits 7a–7c for trade data.) European tourists were an important
economic driver in the country, and Europe was home to large Moroccan communities. 23 Since 2000,
Morocco had also been focused on expanding its presence in Africa, both diplomatically and
commercially. The country had forged hundreds of agreements and treaties with African governments
and expanded the presence of Moroccan banks in over 20 countries on the continent. 24 Casablanca
served as a key air transit point for travelers in Africa, and Morocco’s state-run airline was among
Africa’s largest. 25
Still, analysts pointed to significant potential for Morocco to expand its integration with the global
economy. For example, Morocco had some 5,300 export businesses in 2017—“a number that has barely
changed in 15 years,” according to the World Bank—while Turkey, for example, had some 60,000
(taking population differences into account, Turkey had 4.8 times more exporting firms than
Morocco). 26 On the Word Bank’s “Ease of Doing Business” index, Morocco ranked 69th out of 190
economies worldwide. (See Exhibit 8 for Middle Eastern and African markets’ Ease of Doing Business
rankings, Exhibit 9 for economic data from 2012 to 2016, and Exhibit 10 for an economic forecast.)
To increase the country’s attractiveness to international investors, the Moroccan government had
begun investing heavily in infrastructure projects, often leveraging public-private partnerships. In
2015, for instance, King Mohammed VI announced that Morocco would increase its share of renewable
electricity generation to 52% by 2030 through investments in solar, wind power, and hydraulic dams.
The country’s $9 billion solar plant, Ouarzazate, was described as on track to become the world’s
largest upon completion in 2018. 27 In 2016, over $3.3 billion went toward projects such as the country’s
rural roads program. 28 In addition, the Moroccan and French governments had committed some $2.4
billion to build Africa’s first high-speed railway, between Casablanca and the city of Tangier. 29
Agriculture in Morocco
Agriculture accounted for about 15% of Moroccan GDP—a share that had been roughly stable over
35 years—and 39% of employment. 30 Around two-thirds of land area (excluding Western Sahara) was
classified as agricultural, with 47% as permanent pasture, 18% arable land, and 3% used for permanent
crops. 31 Grains, particularly barley and wheat, accounted for over 60% of production, although
Morocco relied heavily on wheat imports, which totaled $1.3 billion in 2016. 32 Other key crops included
citrus fruits, dates, grapes, olives, pulses, sugar crops, and vegetables. 33 Areas of the country with
3
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718-002
OCP Group
access to dam water or with steadier rainfall also supported dairy and beef farms, while sheep
production was common in the dry south and east. 34 Agricultural output fluctuated yearly—the wheat
harvest contracted 70% in 2016—with a considerable influence on economic growth. 35
Several factors constrained agricultural output growth, especially freshwater scarcity. Most farms
relied on rain, which was limited and erratic from year to year. Only 15% of agricultural land was
irrigated, 36 a percentage that was growing slowly due to water constraints; a priority for the
government was shifting existing irrigation to the more efficient drip model. In rural communities,
which often relied on a single water source, poor sanitation sometimes caused water contamination. 37
Most farming was traditional and did not use mechanization or sufficient fertilizer. The World Bank
reported Morocco’s fertilizer usage at almost 67 kilograms (kg) per hectare (ha) of arable land in 2014
(see Exhibit 11), with wide fluctuations over time: 49 kg in 2004, 60 kg in 2006, 41 kg in 2009, 57 kg in
2012. 38 Usage by the average small farmer was far lower. OCP funded farmer-education programs,
partly in conjunction with the Agriculture Ministry, but did not sell subsidized fertilizer in Morocco.
Only 18% of Moroccan farmers had access to bank loans. 39 Another concern was land degradation and
desertification caused by factors such as overgrazing and destruction of vegetation.
In April 2008, the government launched the Green Morocco Plan (GMP), which called for domestic
and foreign investment to expand the agricultural workforce, increase the use of technology, promote
the productivity and sustainability of farm income, and better integrate Morocco with the world
economy through agriculture. The GMP sought to develop modern agriculture as well as support small
farms in rural areas. 40 It included roughly 1,500 programs of varied scale, such as providing financing
and insurance to farmers, encouraging aggregation to overcome land fragmentation, introducing
modern production techniques, and converting to crops with higher added value or less sensitivity to
precipitation. 41 Abir Lemseffer, head of the Minister’s Cabinet of the Moroccan Ministry of Agriculture,
Fisheries, Rural Development, and Forests, described some of the successes of the program to date:
The Ministry has invested a lot in extension services and set high goals for increasing
production of crops such as dates and citrus. In citrus for example, Morocco produced 1.3
million MT in 2008 and is now producing 2.3 million MT. Moreover, we have increased
overall food exports by 47% since 2008 by gaining access to new markets, export
promotion, and other efforts. . . . Next the government is looking to move its focus from
fresh fruit to processed—juice, extra virgin olive oil, canned goods, etc. To promote this,
the government is primarily offering subsidies on investment, in the form of 30% of the
value of capex. 42
Fertilizer
Farmers used fertilizer to supplement natural soil nutrients with the aim of improving plant health,
quality, and yield. Most fertilizer products contained one or more of three macronutrients: nitrogen
(N), phosphorus (P), and potassium (K). Each served an important function in plant development.
Nitrogen
Nitrogen, the most widely available and consumed macronutrient in fertilizer, increased plant
yields by promoting protein formation. Because natural gas was the main input for production of
nitrogen fertilizers, swings in natural gas availability and pricing affected the price and profitability of
nitrogen fertilizer products. The two most common such products were urea and ammonium nitrates.
4
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OCP Group
718-002
Nitrogen did not accumulate in soils over time, allowing farmers to reapply nitrogen fertilizers within
a single growing season if desired. 43 (See Appendix A for more on this key macronutrient.)
Potassium
Potassium helped regulate plants’ physiological functions, including water use and protection from
drought, disease, and the cold. Potassium was derived from potash ore, which was mined from
underground or, less commonly, found in natural surface or sub-surface brines. 44 Large concentrations
of economically recoverable potassium reserves were found in just a handful of countries, including
Belarus, Canada, and Russia. 45 Minerals containing potassium were processed into a range of chemical
forms, such as potassium chloride (KCl, often called muriate of potash [MOP] or simply potash). The
potassium content of fertilizer was measured as K2O, containing 83% potassium by weight. 46
Phosphorus
Phosphorus aided in root development, photosynthesis, and seed germination. Unlike nitrogen,
phosphorus (as well as potassium) could build up in soil and remain for a few years. Phosphate rock
was mined from underground or open-pit sources in several countries and regions, notably Morocco
as well as China, the U.S., Russia, and elsewhere in North Africa and the Middle East. 47 (See Exhibit
12 for a map of worldwide phosphate reserves.) The ease of accessing the rock (which was 10% to 30%
phosphorus by weight), as well as its concentration of phosphorus (measured as P2O5) varied by
location and impacted the economic viability of a given mining region. As a share of global
consumption, 85% of phosphorus was used in phosphate fertilizers, 9% in technical applications (e.g.,
for production of detergents and electronics), and 6% in animal feed. 48 Phosphate rock could be applied
directly to acidic soils as a fertilizer, but this accounted for a minimal amount of usage.
In the phosphate fertilizer production process, phosphate rock was converted into phosphoric acid
through a chemical reaction using sulfuric acid, which was then mixed with ammonia, potash, and
other nutrients to create fertilizer. The most common phosphate-based fertilizers were diammonium
phosphate (DAP, 46% P2O5, 18% N) and monoammonium phosphate (MAP, 52% P2O5, 11% N). 49 About
48 million MT of phosphate fertilizer (in P2O5) was consumed in 2014, of which users in Asia and the
Middle East consumed 56%, South America 14%, North America 12%, Europe 11%, and Africa and
Oceania each just under 4%. 50 (See Exhibit 13 for consumption over time.)
Fertilizer Products
Depending on the fertilizer type, crop needs, and available technologies, fertilizer could be applied
directly to the plant or soil, or diluted in water and applied via irrigation. The rate at which fertilizers
released their nutrients to plants and soils varied from quick- to slow-acting; some fertilizers were
coated to control nutrient release. 51 Many fertilizers were mixtures, in varying relative concentrations,
of nitrogen, phosphorus, and potassium chloride: these products were called “NPKs.” An NPK
fertilizer labeled 15-15-15, for instance, implied that it contained 15% each of nitrogen, P2O5, and K2O.
The most basic form of NPK fertilizer was mechanically blended, which simply involved mixing
two or more dry ingredients. A downside of blended products was that ingredients could settle
unevenly in the bag, leading to uneven nutrient distribution in the field. Another form was
compounded fertilizer, in which ingredients were formed into granules through a blending and
chemical process. This enabled more consistency than blended fertilizer, but the concentration of
ingredients was still not entirely uniform between granules. A third type, complex fertilizers, were
produced through a chemical combination of the ingredients that ensured that each granule contained
the exact specified proportions of nutrients (e.g., 15-15-15). Complex fertilizers were considered the
5
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OCP Group
highest quality. While more expensive to produce than other types, they commanded higher prices and
margins on the market. 52
The Global Fertilizer Industry
The value of global raw material and finished fertilizer production was $302 billion in 2014, the
most recent data year published by the International Fertilizer Association. 53 Finished fertilizer sales
totaled about $172 billion that year. 54 (See Exhibit 14 for industry value by nutrient.) From 2015 to 2019,
analysts projected over $83 billion in capital investments in the global fertilizer industry, including
construction of new fixed assets and improvements of existing assets. 55 It was estimated that China,
with its large and fragmented phosphate and nitrogen industries, employed two-thirds of the total of
925,000 people directly employed in the global fertilizer industry. 56
Fertilizer demand was driven by factors such as demand for food, animal feed, and fuel, as well as
agricultural production and prices, scarcity of arable land, dietary patterns in developing countries,
and population growth (see Exhibits 15 and 16). Depressed economic prospects and crop prices,
political instability, trade policy, competition, and energy prices all influenced the market and
contributed to fertilizer price volatility. Global fertilizer prices had been largely stable for 25 years until
2007–2009, when they surged and then tumbled; prices had since been highly volatile (see Exhibit 17).
In the 2016–2017 crop year, world fertilizer demand increased 2.4% to approximately 186 million
MT, and was expected to reach about 199 million MT in 2021–2022. 57 Projected demand growth in
mature markets such as North America and Western Europe was relatively weak, given the existing
high use of fertilizer by many producers in those regions (refer to Exhibit 11). Africa, where fertilizer
use in most countries was below (often well below) optimal levels, was expected to see the strongest
rate of demand growth, followed by Eastern Europe and Central Asia, as well as Latin America—all
regions with great potential for agricultural growth in the coming decade. In volume terms, the greatest
demand increases were expected to come from South and East Asia and Latin America. 58
OCP Group History
In 1921, OCP (then “Office Chérifien des Phosphates”) began excavating rocks from its first mine in
the Khouribga area of Morocco, about 120 km from Casablanca. OCP soon began transporting
phosphate rock by train to the port of Casablanca for export (see Exhibit 18 for a historical photo). In
1956, OCP started developing its first open-pit mines, progressively moving away from underground
mining. OCP gradually expanded its mining presence, and in 1965, a milestone came with the launch
of its Safi chemical platform, marking its first step in forward integration. In the 1970s, OCP acquired
a majority stake in the then-Spanish-owned mining operations in Boucraâ (full ownership was
completed in 2002) and continued investing in production lines for phosphoric acid. The 1980s saw
further expansion, including the launch of OCP’s Ben Guérir mine site and its Jorf Lasfar chemical
plant, about 200 km from Khouribga. The complex began producing phosphoric acid in 1986, and its
first fertilizer production lines became active in 1987. (See Exhibit 19 for a map of operations.)
In the 1980s, OCP’s then leadership considered making a major investment in forward integration
as a way to increase the value captured from the state’s phosphate reserves and give OCP a stronger
long-term competitive position. However, amid the pressures of an International Monetary Fund (IMF)
structural adjustment program, investments were put on hold indefinitely. Terrab recalled that the IMF
program limited OCP’s ability to invest and instilled a conservative mind-set with respect to change.
“OCP had started moving into chemical processing and fertilizer, but with structural adjustment, all
that halted,” said Ghislane Guedira, Executive Vice President and Chief Financial Officer.
6
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In the 2000s, with global fertilizer demand growing faster than demand for phosphate rock and
phosphoric acid, 59 OCP revisited the need to transform in order to get ahold of the “real” demand. In
2006, the decision was made to bring in Terrab as the new Director General of OCP.
Mostafa Terrab
After earning an engineering degree in 1979 from École Nationale des Ponts et Chaussées in France,
Terrab attended the Massachusetts Institute of Technology (MIT) in the U.S., where he earned a
master’s in science and a PhD in operations research. He taught at the Rensselaer Polytechnic Institute
in New York before returning to his home country of Morocco and serving as Chargé de Mission in the
King’s Royal Cabinet. In the 1990s, he played a key role in reforming Morocco’s telecommunications
industry—until then a state monopoly—by introducing competition. Terrab, who led Morocco’s first
telecom regulator, recalled the advice of an experienced European telecom regulator describing the
delicate effort: “You need to introduce enough mice [competitors] into the arena so that the elephant
[the incumbent state agency] learned to dance, but not so much that it died from fear.” In 2002, Terrab
took new positions in Washington, DC, first as lead regulatory specialist and then as head of the World
Bank’s Information for Development program, roles in which he focused on telecom sector
liberalization policies and practices in various countries. In 2006, he again returned to Morocco to take
over at OCP, where he first served as Director General before being named Chairman and CEO in 2008.
Laying the Groundwork for Transformation
Terrab joined OCP with the mandate that the organization undertake reforms to governance,
financial policies, personnel practices, and other functions to better reflect an orientation toward
market dynamics and performance accountability. One of his first major initiatives was to convert OCP
into a corporation, a process complicated by the fact that “the group had been generating small,
sometimes negative earnings because of a volume-based royalty system, and ended up having negative
equity,” said Terrab. “This legally prevented us from converting into a corporation.” Part of the
problem was the large pension liabilities on OCP’s balance sheet. To improve its standing, OCP sold
off 5% of its equity to Banque Centrale Populaire (BCP), then a 43.29%-state-owned Moroccan bank
listed on the Casablanca Stock Exchange, in a share-plus-cash transaction that led to OCP owning 6.7%
of BCP. The equity injected by the new shareholder, among other factors including increased revenue
enabled by a spike in fertilizer prices, allowed OCP to outsource its pension liabilities, ultimately
helping facilitate its 2008 conversion into a joint-stock corporation.
OCP remained virtually state-owned, with the government holding a 95% stake. The Prime
Minister, the main shareholder, designated the Ministers of Agriculture, Finance, Industry, and other
government departments to act as his representatives on the board. The Minister of Finance was the
dominant shareholder because that ministry represented the government’s interests when the state was
a corporate shareholder. BCP’s Chairman also sat on the board.
When OCP was a pure state agency, its board had been governed by Moroccan administrative law,
with “responsibilities that were different from a corporate board,” said Terrab. “The Ministers’ natural
incentives were on the amount of resources that would flow from OCP back to their sectors. We are
now governed by corporate law, and the Ministers’ responsibilities are exactly as they would be in any
private company. They focus on corporate value and act in favor of the company and its growth
strategy.” Another key change was in the mechanism by which the state drew income from OCP. In
prior years, the Treasury had earned a royalty tied to exported volume, incentivizing OCP to extract
and export product regardless of market dynamics. After Terrab’s arrival, the board agreed to adopt a
7
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OCP Group
dividend policy. A cap was set on the total dividend payout over five years, with the aim of ensuring
that OCP retained enough earnings to finance its capex program at an acceptable debt-to-equity level.
Terrab knew such reforms were needed to secure the financing that, along with retained earnings,
would enable OCP’s investment program. Over time, program financing came from multiple sources,
including multilateral financial institutions (e.g., African Development Bank, French Development
Agency, Islamic Development Bank, KfW) as well as bond issuances in Morocco and Dublin. (Net
financial debt/EBITDA was 2.89x in 2016.) “During our first roadshow in 2013, many investors had
not heard of us,” said Guedira. “They were surprised to learn of this Moroccan company credited with
75% of the world’s preserves.”
Industrial Transformation Program: Increasing Capacity, Reducing Costs
OCP’s $20 billion, 20-year capital expenditure program aimed to vastly increase its industrial
capacity in all three stages of the phosphate value chain: mining, phosphoric acid processing, and
production of finished fertilizers—a segment in which it had a limited presence as of 2008.
Mining
The first step in the value chain was excavation, performed by OCP at four phosphate rock sites to
which it had exclusive mining rights; each site had one or more mines. According to OCP, Morocco
had some of the highest-quality rock reserves worldwide due to ease of access close to the earth’s
surface, high concentrations of P2O5 (averaging 30%), and relative proximity to ports. Access to its own,
economical rock supply gave OCP a major cost advantage over the roughly 30% of global phosphate
product firms that lacked their own rock supply and therefore had to purchase it. 60 (See Exhibit 20 for
OCP’s rock export cash costs.)
Excavation first involved drilling and blasting with explosives to loosen the land and enable access
to phosphate rock, about 11 meters belowground. Massive heavy machinery removed the top layer of
earth, dug out phosphate ore, and transported it to a nearby screening facility where large rocks of
limestone were removed. Next, the loose material was transported via train or conveyor belt to nearby
processing and beneficiation plants, where it underwent several treatment processes depending on ore
quality. These could include washing, floatation (a water-based segregation process), dry beneficiation
(similar to floatation in function but done without water), calcination (removal of organic materials),
and drying (to reduce water content). These processes required substantial water use (85% of the water
was recycled), sourced from urban wastewater treatment plants, desalination plants, and dam
reservoirs.
The next step was to transport treated phosphate rock to coast-based chemical facilities and ports
in Safi and Jorf Lasfar. Historically, this had been done by train, the cost and capacity of which had
limited OCP’s ability to expand production. To break the bottleneck, beginning in 2013 the company
spent $500 million to build a 235 km pipeline to transport rock in slurry form (60% rock, 40% water)
from Khouribga, its biggest mining site, to Jorf Lasfar; construction of pipelines from other mines was
under way. In addition to transporting higher volumes than via rail, the pipeline enabled reductions
in logistics costs and carbon emissions. The process of transporting slurry from Khouribga to Jorf Lasfar
took 24 hours and was gravity-powered, requiring almost zero energy. Water from the pipeline was
recycled at the chemical facilities. From 2007 to 2017, the pipeline and the opening of new mines
allowed OCP to increase its mining capacity from 30 million MT to 44 million MT of phosphate rock.
Additionally, the group had cut its rock production costs from $34 per MT in 2013 to less than $20 per
MT in Khouribga.
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Phosphoric Acid and Fertilizer Production
Procurement For production of phosphoric acid and fertilizers, OCP purchased large quantities
of liquid and solid sulfur, sulfuric acid, and ammonia from long-term partners. “For raw materials, my
first objective is security—to have the product. Price is of course very important but it comes second,”
said Mohamed Belhoussain, EVP of Sales, Marketing, and Raw Material Procurement. Sulfur and
sulfuric acid were sourced from suppliers in the Middle East, Russia, Europe, and North America.
Belhoussain said that with its largest suppliers of sulfur and sulfuric acid, OCP had a “gentleman’s
agreement. We set the yearly volume in advance, but then we negotiate the price quarterly. They know
we are very important to them, and they to us.” In ammonia purchasing, OCP had diversified suppliers
in recent years, moving from a heavy dependence on Russia and Ukraine to other regions, especially
the U.S., where ammonia production had increased due to a shale-gas boom. OCP also sourced
ammonia from suppliers in North Africa, Spain, the Middle East, and Trinidad. Ammonia transport
was particularly expensive because it required specialized ships, underscoring the attractiveness of
using regional suppliers. Ammonia could also be transported in specialized tanks by truck or rail.
Production At OCP’s processing complexes in Safi and Jorf Lasfar, beneficiated phosphate rock
was combined under high heat with sulfuric acid to create phosphoric acid. A portion was exported
and the rest processed internally to create fertilizer, primarily DAP and MAP, but also NPKs and a
growing array of other fertilizer products. As a result of its capex investments, OCP had increased its
fertilizer production capacity from 4 million MT to 12 million MT from 2007 to 2017.
To date, the industrial transformation program had included large investments in improving
efficiencies and expanding mining as well as acid and fertilizer production capacity, especially at the
Jorf Lasfar facility. This vast complex covered an area of over 1,800 ha, of which about 60% was yet to
be developed. On a given day, some 10,000 employees and contractors worked at the site. The
expansion strategy involved building multiple identical, integrated, 1-million-MT-capacity phosphoric
acid and fertilizer production units—what OCP termed its modular investment program. From 2015
to 2017 alone, four new units were built, including one dedicated exclusively to the Africa market.
Construction of another six was anticipated in the coming decade. All of the units were linked to
common infrastructure facilities supplying inputs such as energy (fueled in part by steam generated
by combining sulfur and water to create sulfuric acid) and water (supported by a large desalination
plant with an annual capacity of 25 million cubic meters [m3], with an expansion to 75 million m3 under
way). In one illustration of the operation’s improved efficiencies, OCP could now change the fertilizer
formulation being made in a production line (e.g., from DAP to NPK) within four hours—a process
that 10 years ago would have taken a few days.
To access the expertise needed to build its highly complex facilities at the desired pace, OCP formed
a joint venture with U.S.-based Jacobs Engineering in 2010. The partnership started with a team of
Moroccan and international engineers who developed a blueprint and system for constructing the
identical fertilizer units—a strategy that created significant cost and time efficiencies. Over time, the
joint venture had grown into a formidable company in its own right. “Through this JV we have created
Morocco’s biggest engineering firm,” said Terrab. “This subsidiary now has contracts throughout
Morocco and Africa and is creating value. And that activity is mainly linked back to phosphate. This is
an example of how there are many potential ways for OCP to leverage the phosphate experience.”
The pace of infrastructure development at the Jorf Lasfar complex depended on market demand as
well as the interest of joint-venture partners, specifically fertilizer producers that lacked their own
phosphate rock supply but had access to ammonia in their domestic markets. To such partners, OCP
marketed a 50-50 joint venture opportunity in which the partner shared the cost of building a new 19
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million-MT facility, which “plugged in” to the site’s existing raw material and power infrastructure.
The partner exported phosphoric acid to its home market for further processing into end products. For
OCP, such arrangements provided access to infrastructure financing as well as a stable customer
contract. (Indian fertilizer companies Tata Chemicals and Chambal Fertilizers and Chemicals, for
instance, had entered such a joint venture with OCP.)
OCP’s investment program included a major focus on technology and industrial digitization. The
company installed sensors throughout the production chain that used analytics and big data to
automate assessment of rock quality and adjust the mix of additives (ammonia, etc.) accordingly to
optimize fertilizer production. OCP also implemented software to predict equipment maintenance
needs, programs for 3-D modeling of mines, and lifelike simulation equipment used to train heavymachinery operators. Most notably, OCP launched a state-of-the-art education institution, Mohammed
VI Polytechnic University, which offered degree programs primarily for African students and also
served as a training ground for OCP employees. The university was playing a key role in building the
new skills and capacities necessary to support OCP’s downstream expansion. Terrab considered it a
vital long-term investment in the business and in the human capital of the country as a whole.
Sales In 2016, OCP’s phosphate products (in P2O5 volume) accounted for a large share of imports
in regions across the world, including 68% in Africa, 42% in North America, 31% in Europe, 26% in
South America, and 24% in South and West Asia. Sales took two main forms. The first was sales of
phosphate rock and phosphoric acid to industrial customers who had their own processing units to
produce fertilizer. The second was sales of finished fertilizer to distributors, who often performed some
additional blending themselves before selling fertilizer on to retailers, farmer cooperatives, and
individual large farmers. OCP’s largest sales markets for fertilizer were the U.S., dominated by six large
customers, and Brazil, with four major customers. Europe was another key market. China, the world’s
largest consumer of phosphate, was largely self-sufficient.
In markets where OCP had a low share, product pricing often depended on current terminal prices
(at which local distributors sold to farmers). Where OCP had a large market share, such as in Brazil,
fertilizer prices were negotiated on a cargo-by-cargo or monthly basis, while rock and phosphoric acid
prices were often negotiated quarterly. Belhoussain explained that price dynamics differed in Africa:
“In Africa, it’s more important to give farmers, and governments, visibility on the price. That’s why in
Guinea, for example, we offered a fixed price on fertilizer for one year.” He continued:
Ethiopia is another example. The government tendered for 500,000 MT, and OCP
offered the most competitive price and won the tender. Then Ethiopia later added another
tender of about 180,000 MT. Even though market prices had increased by then, OCP was
sure that quoting a different price for the second tender would not be acceptable. You
can’t be providing farmers in Ethiopia with a bag of fertilizer for $20 and another for $25
in the same growing season. That is confusing and not acceptable. So, we offered it at the
same price and won the second tender. Being aware of these sorts of dynamics is necessary
to build a sustainable business and unlock demand in Africa.
Product Customization and New Customers
In 2017, OCP produced over 40 different types and grades of fertilizer. These included not only
DAP and MAP but also specialty fertilizers such as Teractiv, a mix of phosphate rock and gypsum that
was the company’s first consumer-branded fertilizer, designed for direct application by farmers. That
said, the vast majority of revenue still came from business-to-business sales of commodity fertilizers
such as DAP. Looking forward, the management team planned to attain further forward integration
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by providing custom-made and affordable fertilizers to farmers worldwide. The goal was to tailor the
nutrient content of products to the specific crops and soil conditions of different markets (see Exhibit
21). Doing so would help OCP reach its goal for the second 10-year phase of its capex program: to
increase fertilizer production by about 13 million MT, thereby capturing half of the global demand
growth for fertilizer that OCP projected from 2017 to 2027.
“The majority of fertilizer sold in the world today is DAP, which is suitable for some markets but
not for many others,” Terrab noted. Mustapha El Ouafi, Managing Director, added, “If we sell DAP to
farmers in Ethiopia, they’re getting nutrients they don’t necessarily need—i.e., are not absorbed by the
plant or crop and/or do not nourish the soil—which, for some nutrients, like nitrogen, can potentially
lead to environmental runoff in rivers.” El Ouafi continued:
In markets like Ethiopia, the industry to date has made the most easy-to-produce
product [DAP] and pushed it to the farmer. The farmer has had no choice but to accept
this because it’s the only offer on the market. The only type of competition was on cost.
But we see a movement in the market, already in the developed markets, and it will
transfer to developing markets, where farmers are becoming more sophisticated, doing
their own mixes on the farm. Moreover, there is more pressure on application practices
because when there are unnecessary nutrients in the fertilizer because it’s not right for the
soil or the crop, it’s running off into rivers, etc. So everything is moving towards
customization, and we want to develop the major customized products that will be
needed—100 to 200 of them.
In 2017, OCP was 10 years and $8 billion into its industrial transformation program, with another
10 years and $12 billion in investment ahead. Of the roughly 44 million MT of rock capacity OCP had,
26 million MT were earmarked for phosphoric acid processing, leaving a surplus of 18 million MT of
rock for trade. Of the phosphoric acid capacity, a portion could be destined for export and the rest used
for fertilizer manufacturing—12 million MT of fertilizer capacity in total. (Refer to Exhibit 3.) OCP had
2016 revenues of $4.3 billion, had EBITDA of $1.3 billion, and was the number-one exporter of
phosphate in all forms combined, with a 27% global market share. Fertilizer accounted for half of
revenues, phosphate rock for 21%, phosphoric acid for 19%, and other sources (e.g., the engineering
joint venture) for the rest. (See Exhibit 22 for DAP cash costs.)
The Next 10 Years
Looking ahead, OCP’s main focus would be customizing fertilizers, especially for the African
market.
Agricultural Potential in Africa
Agriculture contributed an average of 24% of GDP across Africa in 2014, but it was hampered by
widespread inefficiencies. 61 Only a third of arable land in Africa was under cultivation, and the
continent imported some $35 billion worth of food each year. 62 There were well over 50 million farms
in Africa. 63 Smallholder farmers, who represented an estimated 80% of the continent’s producers, were
also the most susceptible to input and crop price volatility and faced the highest transaction costs. 64
Inadequacies in transportation infrastructure and in access to loans, inputs, mechanization, market
information, and agronomic education all imposed a bottleneck on agricultural development.
At a 2006 meeting in Abuja, Nigeria, Ministers of Agriculture of African Union countries set a target
of increasing average fertilizer use across Africa from 8 kg per ha to at least 50 kg per ha in 2015. 65
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However, usage still averaged just 12 kg per ha continent-wide versus a world average of around 134
kg per ha, according to OCP. In addition to applying insufficient amounts, African farmers often used
a suboptimal formulation for their land and paid two to six times above the world average in fertilizer
prices. 66 “In Africa, the price of fertilizer gets massively inflated from port to the farm gate because of
inefficient logistics and other issues,” said Ameziane (see Exhibit 23). Guedira elaborated:
Fertilizer producers haven’t focused on Africa because it is much easier to sell to big
customers in the U.S., Brazil, and India, than dealing with 50-plus countries with different
governance, needs, and challenges. If producers had leftover fertilizer, they’d send it to
Africa. I’ve heard of ships heading to Africa, getting a call that another customer needs
the supply, and just turning around and heading the other way. As a result, no one in
Africa invests in distribution, because they never know if they can depend on regular
supply. Under these circumstances, why would anyone invest in ports or a fleet of trucks?
Tapping Africa’s agricultural potential was vital not only for Africa, but for the entire world. By
2050, the world population was set to exceed 9 billion, with that of Sub-Saharan Africa growing fastest,
up to 108%. 67 Meeting global food demand in 2050 would require an estimated 70% increase in food
production, and Africa—with about 65% of the world’s unused arable land—was key to solving that
equation. 68 OCP estimated that by improving agricultural practices, the value of Africa’s agricultural
output could increase from $280 billion in 2016 to $880 billion in 2030. 69
OCP’s Africa Strategy
“The way to change the paradigm in Africa is fertilizer,” said Terrab, who estimated Africa’s pentup fertilizer demand at about 20 million MT. OCP’s goal in Africa was to unlock this demand by
offering farmers fertilizers that were affordable and appropriate for local conditions, thereby increasing
their confidence in fertilizers’ efficacy and their willingness to purchase. “The strategy is to view DAP
not as a final product but as a base product that is to be blended to create a final product,” said Terrab.
“We now have a dual focus: produce DAP at the lowest cost possible, and produce final products.”
The Africa strategy was a “pull not push” system, with the goal of generating demand for different
products by improving the local understanding of differences in soil composition and needs. El Ouafi
noted that despite the challenges of serving African markets relative to more mature ones, “it is easier
to promote adoption of new products in Africa than Brazil, for example, because in Africa there is no
legacy or status quo in fertilizer that you need to fight against. In Africa, we can begin trials and
demonstrate convincing results right away. Whereas in Brazil, the cycle of development is in years,
which involves a lot more cost.”
The first pillar of the strategy was to shift from a business-to-business commodity model to one of
customer focus—an approach OCP termed “farmer intimacy.” “Before the last two years, the position
of OCP was classical: we bring the product and let the distributors do the rest,” said Mohamed El
Kadiri, Managing Director and General Secretary. “The new strategy in Africa recognizes that this is
no longer enough. Farmer intimacy is a ‘must have’ because there is such a great gap between needs
and practices.” To gain familiarity with local agricultural conditions and practices, OCP sent teams of
agronomists in “agricultural caravans” to select markets, starting with Morocco and then elsewhere.
The caravans served as soil-testing labs, taking samples and developing detailed digital soil-fertility
maps to inform product development. They also offered mobile extension services: meeting with local
farmers, providing agronomic advice, and recruiting them to participate in product trials (see Exhibit
24 for photos). As of late 2017, OCP had spent $6.5 million on caravans and educational services in
several African markets, training a total of 77,000 farmers and performing roughly 12,000 soil analyses.
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A second pillar of the strategy was to directly and indirectly support development of fertilizer
industry ecosystems, particularly distribution, in African markets. For example, OCP’s dedication of a
1 million MT fertilizer unit in Jorf Lasfar to producing for Africa was designed to signal its commitment
and encourage local firms and governments to invest in distribution. As a further show of commitment,
OCP formed a dedicated subsidiary, OCP Africa, which itself had already established 14 country-based
subsidiaries across the continent. “We set up OCP Africa as a separate entity in part to force a focus of
those teams on Africa,” said a company executive. “Because a rational salesperson would often rather
call a guy they know in Europe and sell for an extra $20 there through a relatively simple transaction
than to sell it for $20 less into a much more complex market in Africa.” In several markets, OCP was
building fertilizer blending and customization capacity or coordinating with local third parties (private
or government) to do so. OCP’s initial focus for major investments was on markets with large
populations and complementary infrastructure and resources, notably gas. Its first major target
markets were Nigeria and Ethiopia. (Exhibit 25 describes operating conditions in these countries.)
Ethiopia Ethiopia was OCP’s top market in Africa to date. El Ouafi noted: “Ethiopia used to buy
fertilizer, DAP, and OCP would compete for it. When we participated in the soil mapping under the
leadership of the Ethiopian government, we saw a clear need for micronutrients—sulfur, zinc, boron—
that could hugely increase yields. So we developed a custom NPS blend for Ethiopia and performed
agronomic tests, and the government, having observed the results of this customized fertilizer formula
on the yields, has converted nearly completely to the one we developed.” (See Exhibit 26 for details.)
OCP was so far producing the NPS in Morocco for export to Ethiopia, but that was set to change
through a joint venture with the Ethiopian government to build a fertilizer complex in the country. The
$2.4 billion project (phase one) was still undergoing engineering studies and financing negotiations,
with an expected structure of 60% debt and 40% equity. OCP would provide 50% of the equity
financing, with the rest coming from a consortium of investors. While most commitments had come
from multilateral finance institutions to date, OCP also sought patient capital from private industrial
firms, sovereign wealth funds, and pension funds. Local fertilizer distribution was to be performed by
a government agency, and eventually the complex would produce enough to export internationally,
providing sales opportunities for OCP and a vital source of foreign currency to the Ethiopian state.
Phosphoric acid would be sourced from Morocco and ammonia from Ethiopia’s growing gas industry.
OCP and Ethiopian officials were negotiating for space at the port in neighboring Djibouti—Ethiopia
was landlocked—which was being developed with major Chinese investment.
Nigeria OCP was also investing in Nigeria ($1.5 million to date, including fertilizer
development), with a focus on the north-central state of Kaduna. As in other African markets, OCP’s
efforts in Nigeria began with a series of agricultural caravans to understand local conditions and needs,
as well as gradual relationship development with area tribal leaders and government officials. Based
on its soil and market assessment, OCP had developed two specialized fertilizer formulations tailored
for cocoa and maize production in Nigeria. OCP was working with investment institutions and local
partners to promote industrial investment in ammonia and fertilizer production plants in the country.
The goal was ultimately to export phosphoric acid from Morocco to Nigeria, where it would be mixed
with locally produced ammonia and other nutrients to make fertilizer, including blends tailored to
local needs. OCP also planned to import ammonia from Nigeria for use by OCP in Morocco.
From 2007 to 2016, OCP’s total fertilizer exports to Africa rose from 50 kilotonnes to 1.7 MT. Of the
40 fertilizer types and grades OCP produced, 10 were for Africa, including the customized
formulations for Ethiopia and Nigeria as well as others for cocoa plantations in Côte d’Ivoire, maize
crops in Kenya, and cotton production in Benin, Burkina Faso, Côte d’Ivoire, Mali, and Togo. “We have
created a complex order book; the question is how to fulfill it in the most efficient way,” said Terrab.
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Internal Culture
For Terrab, the transformation strategy was also about internal culture and talent—priorities since
his early days at OCP. Over his tenure, the average age of OCP’s 23,000 employees had fallen from 45
to 35, and women in managerial roles had increased from 10% to 35% (though still low at top levels).
Terrab had worked to move employees from headquarters out to production sites, and he was striving
to shed bureaucracy and hierarchical norms. He recounted changes in the “internal social contract”:
“In the past, advancement was done in a way that preserved social peace. It was slow and steady: you
knew if you stuck around, you’d move up. Today, young people don’t want that. Now we allow for
fast tracks to higher positions.”
Terrab and others in OCP articulated an aim of instilling a “start-up mentality” in the organization.
To shake up internal silos and stimulate bottom-up innovation, Terrab appointed an OCP manager
with an engineering background to lead a newly created internal program called Le Mouvement. The
program encouraged employees to form, of their own initiative, cross-functional teams focused on
generating ideas to improve company practices and solve problems. Strong proposals had the potential
to be implemented. Managers were asked to allow employees to spend time on such projects, with the
onus on the manager to fill any resulting work gaps. Le Mouvement was still a new program, but Terrab
was heartened by the creativity and resourcefulness he had witnessed so far.
“This is about generating internal capacity for innovation,” he reflected. “It is also about our talent.
We have a critical mass of millennials who want a different type of professional life. So we must adapt
to an environment that is more conducive to liberating their energy and giving them a sense that they
can really contribute to the company. The new generation wants to be motivated by the why of their
work, not just the what. And it is hard to enable that in a classic hierarchical organization.”
“Our Africa strategy goes to the why, the purpose of OCP,” Terrab continued. “Any individual as
well as any company needs a linear, stable part of them, as well as an aspiration, an ongoing challenge.”
Reflecting on the Strategy
One question ahead was whether OCP’s state-owned status would help or hinder its strategy.
Should Terrab consider selling more equity to private investors? Executing a public offering? “The
decision is ultimately the shareholders’; the red line, however, is that the state will always retain
control,” said Guedira. “And with the state as our shareholder we can take a long view, which makes
it easier for us to invest. That’s not to say we won’t be comfortable selling some shares at some point,
for financing needs but also because, as a company from a part of the globe little known by the financial
community, maybe an IPO would make sense someday. But for the moment, as long as we have access
to debt under good conditions, that’s better for us.”
State ownership was a plus in the Africa context, according to Ameziane: “I believe the perception
of SOEs [state-owned enterprises] is somewhat more positive in Africa versus Western countries. An
SOE is a known quantity and has the advantage of a more patient shareholder with long-term thinking,
critical in doing business in the continent. And being African makes us natural partners. We have a
greater understanding of the particularities of the Africa context.”
Another question was how aggressively OCP should pursue its Africa strategy. El Ouafi presented
the conservative argument: “Internally there was intense debate, and investing in downstream
capabilities, in farmer intimacy, and in Africa was not considered by some as a ‘no-brainer.’ Up to now
we have had cost competitiveness; we can win tenders. Why not stay in our comfort zone, where we’re
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sitting on this asset over which we have full control and can do very well? Why even do this
diversification at all? Are we better positioned for low cost, or for differentiation? Can having both be
more value creative?”
“Our mandate is to take the phosphate we have in the earth and make the most value out of it,”
added Terrab. What was the best way to do that? Was the strategy of focusing on finished products
and customization the best way forward? Or should OCP stick to its historical core strength: being a
low-cost producer of P2O5, a segment in which it had deep experience and scale? What was the best
way to leverage Morocco’s phosphate resources and drive value for OCP Group, and for Morocco?
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Exhibit 1
OCP Group Selected Financial Data, 2008–2016 (US$ millions)
2008
2009
2010
2011
2012
2013
2014
2015
2016
Total Revenue
7,463
3,200
5,163
6,186
5,953
4,747
4,929
4,891
4,331
EBITDA
4,181
267
1,925
2,935
2,159
1,199
1,356
1,809
1,303
EBIT
3,565
483
2,594
2,781
2,043
1,029
1,082
1,416
846
Net Income
2,924
172
1,080
2,382
1,607
863
604
821
385
Source:
Company documents.
Exhibit 2
Source:
Evolution of OCP’s Consolidated Sales, 1990–2016 (US$ billions)
Company documents.
Exhibit 3
OCP’s Position in the Global Phosphorus Market, 2007 and 2017
CAPACITY (MT mil.)
Global Total
Phosphate rock
Phosphoric acid (in P2O5)
Phosphate-based fertilizer
Transport capacity (rail vs. pipeline)
Port capacity
EXPORTS (MT mil.)
OCP
Global Total
OCP
2007
2017
2007
2017
2007
2017
2007
2017
205
42.3
72.9
—
289
59.1
98.2
—
30
3.5
4
26
30
44
7.3
12
64
50
31.3
4.6
22.0
—
30
4.9
33.6
—
14.1
2.1
2.4
—
10.7
2.0
8.0
—
Source:
Compiled from company documents.
Note:
2017 figures are estimates.
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Exhibit 4
Source:
718-002
Map of Morocco and Africa
Google Maps.
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Exhibit 5
Source:
Morocco GDP Growth (real % change) and Real Effective Exchange Rate,a 1997–2016
Compiled from Economist Intelligence Unit Country Data, accessed March 2017. Data reused by permission of
The Economist Intelligence Unit.
a Real effective exchange rate (REER) is a trade-weighted basket of currencies converted to an index (1997 = 100) and adjusted
for relative price movements (CPI-based). A rising REER reflects more expensive exports and reduced competitiveness.
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2%
Investment inventories/GDP
47
-3%
16%
GINI coefficient *100
Government surplus/GDP
Public debt/GDP
54%
-3%
33
18%
-22%
9%
0%
38%
10%
66%
1,900
49%
62
-0.2
105
1,162
122
1,448
15%
1,000
Ethiopia
52%
0%
35
5%
-22%
19%
3%
28%
11%
61%
6,600
71%
69
0.0
1,282
1,491
1,911
1,224
53%
2,973
India
54%
-7%
43
40%
-23%
15%
-1%
17%
14%
79%
3,400
78%
64
-0.2
48
645
31
1,171
10%
569
Kenya
77%
-4%
41
10%
-43%
34%
2%
29%
19%
59%
8,300
69%
77
-3.2
34
855
29
2,302
18%
446
Morocco
13%
-2%
49
14%
-10%
9%
1%
14%
7%
79%
5,900
60%
53
-0.2
191
1,498
286
1,779
37%
911
Nigeria
43%
-4%
63
27%
-33%
35%
1%
20%
20%
58%
13,200
94%
63
-0.9
55
938
51
2,215
10%
1,214
South Africa
34%
-3%
38
10%
-23%
20%
-6%
34%
14%
62%
3,100
78%
63
-0.5
54
1,784
96
2,348
14%
886
Tanzania
74%
-3%
45
5%
-15%
12%
1%
16%
18%
69%
57,400
NA
80
3.9
327
9,397
3,069
4,706
17%
9,148
U.S.
-19-
Source: Compiled from CIA World Factbook, www.cia.gov, except renewable water data, which is from World Factbook archives via Index Mundi (2014), accessed November 2017.
a Computed from other values in the table.
4%
Unemployment rate
-19%
44%
Investment fixed capital/GDP
Imports/GDP
14%
Government consumption/GDP
22%
37%
Private consumption/GDP
Exports/GDP
15,400
GDP/capita @ PPP – US$
96%
76
Literacy rate
-0.4
1,379
Population – million
Life expectancy
2,059
Net migration – per 000
2,840
Renewable water per capita, in
cu. m
764
11%
Renewable water – cu km
Arable land per person – sq ma
fraction arable
9,326
China
Country Data for Morocco and Selected Markets, 2014
Land area – 000 sq km
Exhibit 6
718-002
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718-002
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Exhibit 7a
Source:
Morocco Exports and Imports of Goods, 1997–2016 (US$ billions)
Compiled from Economist Intelligence Unit Country Data, accessed March 2017. Data reused by
permission of The Economist Intelligence Unit.
Exhibit 7b Morocco’s Top Export Types (goods, FOB), Value ($ billions) and Share of Total
Export Value (%), 2014
Finished clothes
Electrical cable and wires
Fertilizers and chemicals
Phosphoric acid
TOTAL
Source:
Value ($ billions)
% of Total
$2.4
$2.2
$2.1
$1.5
$24.0
10.0%
9.2%
8.6%
6.4%
100%
Compiled from Economist Intelligence Unit Country Data, EIU database, accessed March 2017.
Data reused by permission of The Economist Intelligence Unit.
Exhibit 7c Morocco’s Top Import Types (goods, CIF), Value ($ billions) and Share of Total
Import Value (%), 2014
Fuel and lubricants
Semi-finished goods
Capital goods
Consumer goods
TOTAL
Source:
Value ($ billions)
% of Total
$11.1
$9.8
$9.8
$8.2
$46.3
23.9%
21.2%
21.2%
17.8%
100%
Compiled from Economist Intelligence Unit Country Data, EIU database, accessed March 2017.
Data reused by permission of The Economist Intelligence Unit.
20
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83
88
92
South Africa
Qatar
Tunisia
Saudi Arabia
148
153
154
161
162
166
190
Nigeria
Burkina Faso
Guinea
Djibouti
Ethiopia
Madagascar
Algeria
Somalia
44
187
145
76
174
115
125
74
130
186
146
183
169
84
75
53
147
152
156
187
120
184
125
169
158
179
172
129
82
89
173
150
163
161
139
168
143
140
179
113
142
119
124
119
72
24
93
26
107
125
86
25
2
10
Registering
Property
186
177
133
173
183
142
142
6
142
55
90
55
55
159
90
105
133
68
29
105
105
6
90
Getting
Credit
190
170
96
176
96
146
146
33
146
129
81
108
96
146
10
119
177
24
62
62
108
16
10
Protecting
Minority
Interests
190
157
131
133
108
182
153
171
175
154
167
84
116
97
76
140
1
46
92
25
5
31
1
Paying
Taxes
160
181
134
167
159
165
113
183
155
182
170
127
158
53
161
96
90
147
106
65
78
87
91
Trading
across
Borders
110
103
158
68
175
117
163
96
101
58
160
64
116
118
83
76
123
115
90
57
111
85
12
Enforcing
Contracts
168
71
133
122
73
111
104
145
77
108
115
113
158
146
168
63
116
55
95
134
90
78
69
Resolving
Insolvency
A high ease of doing business ranking (closer to 1) implied a regulatory environment more conducive to the starting and operation of a local firm. See source for methodology.
145
Côte d’Ivoire
162
66
148
136
40
59
48
65
112
71
72
79
119
1
Getting
Electricity
Note:
139
Tanzania
165
103
131
110
38
95
19
94
124
17
47
112
2
Dealing with
Construction
Permits
“Doing Business—Economy Rankings,” benchmarked to June 2017, World Bank website, http://www.doingbusiness.org/rankings, accessed November 2017.
137
Egypt
110
105
135
100
89
136
117
35
75
78
51
Starting a
Business
-21-
Source:
122
128
Uganda
120
82
Kenya
103
80
Morocco
Ghana
69
Bahrain
Jordan
41
66
Rwanda
21
Overall Ease
of Doing
Business
World Bank Ease of Doing Business Rankings, Select Middle Eastern and African Economies, 2017 (global = 190 economies)
UAE
Exhibit 8
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718-002
OCP Group
Exhibit 9
Morocco Economic Snapshot, 2012–2016
2012
2013
2014
2015
2016
Nominal GDP (US$ m)
98,561
107,147
110,229
100,895
103,825
Real GDP growth (%)
3.0
4.5
2.6
4.5
1.5
Private consumption
2.8
2.6
4.1
4.6
2.2
Government consumption
8.5
4.2
1.8
1.9
1.4
Gross fixed investment
1.6
-0.5
-2.1
1.5
2.0
Exports of goods & services
2.6
0.0
8.4
6.0
2.4
Imports of goods & services
1.7
-0.1
3.3
-3.1
3.5
-8.0
17.9
-2.3
12.9
-9.8
Expenditure on GDP (% real change)
Origin of GDP (% real change)
Agriculture
Industry
0.9
1.0
3.0
3.0
1.0
Services
6.5
1.9
2.5
1.4
1.3
Fiscal indicators (% of GDP)
Central gov. budget revenuea
26
26.2
25.4
23.8
23.7
Central gov. budget expenditure
33.4
31.2
31.0
28.7
28.2
Central gov. budget balance
-7.4
-5.1
-5.5
-4.9
-4.5
Public debt
69.5
73.7
75.3
75.7
77.6
Prices and financial indicators
Exchange rate Dh:US$ (av)
8.6
8.4
8.4
9.7
9.8
Consumer prices (av; % change)
1.3
1.9
0.4
1.6
1.6
Producer prices (av; % change)
2.9
-1.9
-2.8
-1.0
-0.5
Money market rate (av; %)
3.2
3.1
2.9
2.5
2.3
-21,885
-21,592
-20,687
-14,688
-16,568
Current account (US$ m)
Trade balance
Goods: exports fob
16,992
18,262
19,996
18,619
19,103
Goods: imports fob
-38,877
-39,854
-40,683
-33,307
-35,671
Services balance
7,210
6,781
7,046
6,761
7,087
Primary income balance
-2,283
-1,771
-2,652
-1,882
-1,942
Secondary income balance
7,115
7,889
10,025
7,649
8,270
Current-account balance
-9,843
-8,692
-6,267
-2,161
-3,154
Debt stock
33,836
39,263
42,809
42,989
44,463
Debt service paid
3,599
5,068
4,772
3,553
4,434
829
1,070
1,058
1,091
1,294
17,390
19,049
20,523
23,008
25,366
External debt (US$ m)
Interest
Total internat’l reserves (US$ m)
Source:
Adapted from “Morocco—Economy,” Economist Intelligence Unit, via EIU database, accessed March 2017. Data
reused by permission of The Economist Intelligence Unit.
Note:
Public debt figures from 2014, 2015, and 2016, and the 2015 producer price figure, are estimates.
a Excludes revenue from the sale of state assets.
22
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OCP Group
Exhibit 10
718-002
Morocco Economic Forecast, 2016–2021 (% unless otherwise indicated)
2016
2017
2018
2019
2020
2021
Real GDP growth
1.5
4.0
3.3
3.0
3.4
3.7
Gross fixed investment growth
2.0
2.5
2.5
2.4
3.2
3.5
Gross agricultural production growth
-9.8
12.5
5.5
3.0
-1.8
6.0
Unemployment rate (av)
9.4
9.3
9.5
9.7
9.6
9.5
Consumer price inflation (av)
1.6
2.3
2.2
1.6
1.8
2.2
Short-term interbank lending rate (av)
2.3
2.3
2.4
2.5
2.6
2.6
General govern’t balance (% of GDP)
-4.5
-3.7
-3.6
-3.3
-3.1
-3.0
Exports of goods fob (US$ bn)
19.1
19.8
20.5
21.1
21.9
22.9
Imports of goods fob (US$ bn)
35.7
39.2
41.1
42.1
44.2
46.6
Current-account balance (US$ bn)
-3.2
-5.3
-6
-5.7
-5.9
-6.4
Current-account balance (% of GDP)
-3.0
-5.0
-5.3
-4.6
-4.5
-4.6
External debt (end-period; US$ bn)
44.5
45.7
46.5
48.2
50.2
52.5
Exchange rate Dh:US$ (av)
9.78
10.17
10.11
9.70
9.57
9.48
Exchange rate Dh:€ (av)
10.82
10.80
10.77
10.74
10.79
10.90
Exchange rate Dh:¥100 (av)
8.99
8.76
9.55
9.65
9.56
9.49
Source:
“Morocco—Economy,” Economist Intelligence Unit, via EIU database, accessed March 2017. Data reused by
permission of The Economist Intelligence Unit.
Note:
2016 data are estimates, except for exchange rate and inflation figures, which are actual. Data for 2017–2021
are forecasts.
23
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OCP Group
Exhibit 11
Source:
Fertilizer Usage Rates in Selected Countries (kg/ha of arable land), 2014
Compiled from “Fertilizer Consumption—kilograms per hectare of arable land,” The Food and Agriculture
Organization of the World Bank website, https://data.worldbank.org/indicator/AG.CON.FERT.ZS, accessed
November 2017.
24
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Exhibit 12
718-002
World Phosphate Reserves (MT billions)
Russia
1.3
United States
1.1
Peru
0.8
Morocco
50
Syria
Israel 1.8
0.1
Iraq
Algeria Jordan 0.4
1.3 KSA
2.2
0.2
Brazil
0.3
South Africa
1.5
China
3.7
Australia
1,0
Source:
Company documents, citing U.S. Geological Survey, 2015.
Note:
Figure for Morocco includes Western Sahara, which represents around 1.6% of that figure.
Exhibit 13 Worldwide Past and Forecast Phosphate-Based Fertilizer Consumption, 1998–2028
(millions of MT of P2O5)
Source:
Company documents, citing IFA/Argus FMB for historical figures; Argus FMB for 2013–2028; and selected IFA
country projections to 2017, IFA Conference, 2013.
25
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718-002
OCP Group
Exhibit 14
Nitrogen
Phosphates
Potash
NPK
Total
Global Fertilizer Industry Value, 2014 (US$ billions)
Fertilizer and Raw Material
Production Combined
Fertilizer Sales
$167.0
$86.5
$23.1
$25.5
$302.1
$83.7
$39.4
$23.1
$25.5
$171.7
Source:
Adapted from “Knowledge Resources—Global Economic Impact,” International Fertilizer Association website,
http://www.fertilizer.org/En/Knowledge_Resources/Industry_Facts/En/Knowledge_Resources/Industry_Facts
/Industry_Facts_Home_Page.aspx?hkey=58e629cf-c6c8-40cc-908c-542a701f1ab0, accessed October 2017. See citation
for methodology. 70
Note:
For nitrogen and phosphates, actual sales revenue of fertilizer was about half the value of gross production; the value
of potash production and potash fertilizer sales were roughly equal, as most annual potash production was sold and
not further processed.
Exhibit 15
Source:
Projected Global Population Growth (billions of people), 2010–2050
Company documents, citing UN FAO.
26
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Exhibit 16
Source:
718-002
Global Projections of Arable Land per Capita (ha/capita), 2010–2050
Company documents, citing UN FAO.
Exhibit 17 World Fertilizer Price Index (based on prices in nominal US$, 2010 = 100), January 1990–
September 2017
Source:
Compiled from the World Bank, Global Economic Monitor Commodities, accessed September 2017.
27
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OCP Group
An OCP Mining Site, Approximately 1930
Exhibit 18
Source:
Company documents.
Map of OCP Operations Sites in Morocco
Exhibit 19
Legend
Phosphate deposits
Extraction and
beneficiation (Mining)
Jorf Lasfar
Chemical Hubs
Safi
Ports
1
Slurry pipeline
Khouribga
Raw Mat & ACP Transport Axes
2 Gantour
Conveyor
Projects under consideration
3
4
Meskala
Boucraa
1
Source:
Company documents.
28
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OCP Group
718-002
Exhibit 20 OCP Rock Export Cash Costs (Mine to Plant/Port, $US/MT) vs. Competitors, Price
Band, 2015–2017
Price band of past 3 years
50,000
0
RoW
100,000
OCP-Khouribga/Gantour
Source:
Company documents, citing CRU 2017.
Note:
RoW = Rest of World.
Exhibit 21
150,000
‘000 metric tons
of rock capacity
Illustration of Market Progression from Commodity to Customized Fertilizers
Source:
Company documents.
Note:
Diagram provides examples from the Brazil market, where customized fertilizers were already commonly marketed.
29
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718-002
OCP Group
Exhibit 22
OCP DAP Cash Costs (Mine to Plant, $US/MT) vs. Competitors, Price Band, 2015–2017
Price band of past 3 years
0
10,000
20,000
30,000
40,000
50,000
60,000
‘000 metric tons
of DAP/MAP capacity
OCP
Integrated player
Non integrated player
Source:
Company documents, citing CRU 2017.
Exhibit 23
Source:
Fertilizer Retail Price Structure in Select African Countries vs. Thailand (US$/MT)
Company documents, citing IFDC 2005/2007.
30
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Company documents.
Source:
Exhibit 24
Photos of OCP Caravan for the Cocoa Sector in Côte d’Ivoire, October 2015
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OCP Group
Exhibit 25
Brief Overview of Operating Environments in Ethiopia and Nigeria
Ethiopia This landlocked East African country covered a land area of 1.2 million square km and
had a population of 102 million in 2016. Ethiopia was bordered by Eritrea to the north, Djibouti and
Somalia to the east, Kenya to the south, and Sudan to the west (refer to map in Exhibit 4). Nominal
GDP in 2016 was estimated at $70.3 billion, equating to just $1,735 per capita at PPP. Ethiopia had seen
healthy economic growth in recent years, averaging 9.5% annually from 2012 to 2016, though growth
was projected to slow to around 6% in 2017 and 2018.
On the World Bank’s Ease of Doing Business rankings, Ethiopia was ranked 161 of 190 countries.
Some of its sub-rankings were among the lowest in the world, including ease of trading across borders
(ranked 167th), getting credit (173rd), and starting a business (174th) (refer to Exhibit 8). Ethiopia had a
federal parliamentary government, headed by the prime minister. A major concern of international
observers was the harsh suppression of opposition by Ethiopia’s ruling governing coalition, the
Ethiopian People’s Revolutionary Democratic Front, which sometimes accused its opponents of being
terrorists. Analysts pointed to the alleged oppression of certain ethnic groups, manifesting in economic
marginalization for example, as a source of tension. Another risk to Ethiopia was instability in
neighboring countries, notably Somalia, which faced ongoing bouts of violence from the al-Shabab
terrorist group.
Nigeria
Nigeria covered a land area of 924,000 square km in West Africa and bordered the Gulf
of Guinea to its southwest (refer to map in Exhibit 4). Its population of about 190 million was Africa’s
largest. The country had a nominal GDP of $405.4 billion in 2016, or $5,861 per capita at PPP. On the
World Bank’s Ease of Doing Business Rankings, Nigeria was ranked 145th out of 190 countries (refer to
Exhibit 8).
Key barriers to business development in the country included a poor road system and weak
electricity infrastructure, as well as corruption and bureaucratic red tape. Instability and violence in
parts of the country were also a challenge. Nigeria’s democratically elected president, Muhammadu
Buhari, was away from the country receiving treatment for illness for much of 2017, raising concerns
about political uncertainty. Recent years had seen a push in Nigeria to diversify the economy away
from its heavy dependence on oil, which remained an ongoing project. The country suffered from a
recession in 2016, with 0.8% real GDP growth projected for 2017.
Source:
Compiled from “Ethiopia Annual Data and Forecast” and “Ethiopia Political Instability,” The Economist Intelligence
Unit, August 4, 2017, EIU database; “Ease of Doing Business in Ethiopia,” World Bank website,
http://www.doingbusiness.org/data/exploreeconomies/ethiopia; “Nigeria Basic Data,” “Nigeria Annual Data and
Forecast,” and “Nigeria Briefing Sheet,” The Economist Intelligence Unit, November 1, 2017, EIU database; “Ease of
Doing Business in Nigeria,” World Bank website, http://www.doingbusiness.org/data/exploreeconomies/nigeria,
all accessed November 2017.
32
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Company documents.
Source:
Exhibit 26
OCP’s Fertilizer Customization Efforts in Ethiopia
718-002
-33-
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718-002
OCP Group
Appendix A: More on Nitrogen Fertilizers
Nitrogen fertilizer enabled nearly all crops to grow at higher yields, and applying the appropriate
amount was always profitable for farmers. For wheat, the use of sufficient nitrogen could double or
triple the yield per acre. When applied, the nitrogen was taken up by the crop and removed during
harvest, or lost to the atmosphere or water runoff.
Ammonia: Ammonia contained the highest amount of nitrogen of any chemical compound, and it
served as the basis for nearly all nitrogen fertilizers. It was a poisonous gas at room temperature and
pressure, but was stored and transported as a liquid in pressurized containers. To use ammonia directly
as fertilizer, farmers needed to inject the liquefied ammonia into the soil. Once in the soil, the liquid
ammonia immediately converted back into a gas. This gas reacted with the water in the soil to form
ammonium (NH4+). Some of this ammonium adhered to the soil. To absorb the nitrogen, the plants’
roots needed to grow to be in contact with that part of the soil where the ammonium attached. The
remainder of the ammonium converted to nitrate which was easily utilized by the crop.
Ammonia could be a low-cost and highly effective nitrogen fertilizer under the right conditions, but
it had limitations. Farmers needed specialized equipment and training for the safe handling of
ammonia, as well as large farms to cover the capital costs of the equipment. U.S. corn farmers widely
used ammonia, but safety concerns led many countries to outlaw its use. . . . At their manufacturing
plants, fertilizer companies generally converted most of their ammonia production into urea, or other
nitrogen chemical compounds, before shipment as fertilizer.
Urea: Urea was a nitrogen chemical compound and the most widely sold and used as fertilizer in
the world. It was typically produced as a solid in either prill or granular form. Prilled urea was
generally producer in older plants while newer plants made granular urea. While granular urea was a
harder (stronger) solid than prilled and had improved handling and storage characteristics, some
farmers preferred the prilled form for cost reasons or because their existing equipment was better
suited for prill. Both form shad 46% nitrogen by weight and had similar performance characteristics as
a fertilizer. Urea was non-toxic and small farmers could spread it by hand.
Once in the soil, urea converted to ammonium and then to nitrate in much the same way as
ammonia. This in-soil conversion took time . . . and some nitrogen was lost during the conversion
processes. The amount of nitrogen loss was difficult to predict and many farmers applied up to 20%
excess urea to compensate for these losses.
Nitrates: Nitrate (NO3-), the form of nitrogen directly used by the crop, was perhaps the most
effective nitrogen fertilizer. When nitrate was applied to the soil, it quickly dissolved in the soil water,
diffused through the soil, and became immediately available to the crop—no in-soil chemical
conversion was required and nitrogen losses after application were lower for nitrate than for ammonia
or urea. Because it could be directly used by the crop without conversion or conversion losses, the use
of nitrate led to higher yields than the use of urea.
Nitrate came in several different chemical compounds. These included ammonium nitrate (AN)
(NH4NO3, 33.5% nitrogen) and calcium ammonium nitrate (CAN) (5Ca(NO3)2·NH4NO3·10H2O, 27%
nitrogen). CAN also provided calcium, which was useful in some soils and for some crops. These
compounds could be made in solid and liquid forms to best match the soil, environmental, and
application conditions, as well as the type of crop.
Source:
Forest Reinhardt and James Weber, “Yara International,” HBS No. 714-002 (Boston: Harvard Business School
Publishing, 2013), pp. 4-5.
34
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Appendix B: Description of Select OCP Competitors
Ma’aden
Ma’aden was formed by royal decree in 1997 to facilitate the development of Saudi Arabia’s mineral
resources, initially focused on gold mines. In 2007, Ma’aden included phosphate in its activities and
with an investment of 5.5 billion USD, founded The Ma’aden’s Phosphate Company as a joint venture
with SABIC, a Saudi petrochemical company. The Ma’aden’s Phosphate Company operated a
phosphate mine and a plant that in 2016 had a capacity of 3 million tons of phosphate fertilizer for
global markets. In 2012, Ma’aden formed a new partnership with SABIC and Mosaic, one of the largest
fertilizer firms in the world, called The Ma’aden Wa’ad Al-Shamal Phosphate Company (MWSPC) for
its project of extracting phosphate from the north of Saudi Arabia and producing fertilizer products for
global markets. The investment of $7.5 billion was projected to output 16 million tons of fertilizers. The
company was wholly owned by the Saudi government until 2008, when 50% of its shares were put on
the Saudi Stock Exchange.
The Mosaic Company
The Mosaic Company was formed in 2004 by the merger of IMC Global, a fertilizer company
founded in 1909 in New York, and Cargill Inc.’s crop nutrition division. In the same year, its shares
began trading on the New York Stock Exchange (NYSE). Mosaic had offices in Australia, Brazil,
Canada, China, the U.S., Pakistan, Paraguay, and South Korea. Mosaic’s clients were agricultural
entities such as wholesalers, retail dealers, and individual growers in the U.S. and other countries.
Mosaic was one of the world’s leading integrated producers and marketers of concentrated
phosphate and potash. The company extracted phosphate rock from its mines in Central Florida and
potash from its mines in North America. It was one of the largest producers of finished phosphate
products. In 2016, it had a capacity of producing approximately 5.3 million tons of phosphoric acid,
and approximately 17.2 million tons of phosphate rock. The company was growing globally with joint
ventures in Saudi Arabia and Peru.
PhosAgro
PhosAgro, a Russian company founded in 2003, was among the leading global phosphate rock and
phosphate-based fertilizer producers, with overall capacity exceeding 7 million tons and 5 million tons,
respectively, in 2015. The company’s full integration in the key feed stocks of the phosphate value chain
provided advantages for low-cost production. It was fully self-sufficient in phosphate rock, phosphoric
and sulfuric acids, and also 82% self-sufficient in ammonia, in 2014. Its investment in flexible
production lines also made it possible to transition between different fertilizers depending on market
demand. PhosAgro cooperated with research institutes for rock processing techniques, fertilizer
production, and implementation of sustainable and resource-saving technologies. The company’s
plans for after 2017 included increasing its phosphate rock production and exports, as well as it
phosphate-based fertilizer capacity.
Source:
Compiled from Ma’aden website, www.maaden.com.sa; Mosaic website, http://www.mosaicco.com/; Mosaic
website, “Investors–Press Releases,” http://media.corporate-ir.net/media_files/irol/70/70455/mos2004/
10252004.pdf; and Phosagro website, https://www.phosagro.com/, all accessed April 2017.
35
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Endnotes
1 Company documents.
2 USGS Minerals Information, Statistics & Information, Phosphate Rock 2015,
https://minerals.usgs.gov/minerals/pubs/commodity/phosphate_rock/mcs-2015-phosp.pdf, accessed December 2017.
3 “Morocco,” CIA World Factbook, https://www.cia.gov/library/publications/the-world-factbook/geos/mo.html, accessed
March 2017.
4 “Morocco—Basic Data,” Economist Intelligence Unit, March 2, 2017, via EIU database, accessed March 2017.
5 “Morocco,” CIA World Factbook.
6 “Morocco—Basic Data,” Economist Intelligence Unit, March 2, 2017.
7 “Morocco,” CIA World Factbook.
8 “Morocco,” CIA World Factbook.
9 “Morocco,” CIA World Factbook.
10 “Morocco,” CIA World Factbook.
11 Jean-Pierre Chauffour, “Morocco 2040—Emerging by Investing in Intangible Capital,” The World Bank Group, 2017, p. 54.
12 “Morocco—Overview,” The World Bank website, last updated September 30, 2016,
http://www.worldbank.org/en/country/morocco/overview; and “Morocco—Country at a Glance,” The World Bank
website, http://www.worldbank.org/en/country/morocco, both accessed March 2017.
13 “Morocco Country Report, March 2017,” Economist Intelligence Unit, p. 3, via EIU database, accessed March 2017.
14 “Morocco Country Report, March 2017,” Economist Intelligence Unit, p. 4.
15 “Morocco Country Report, March 2017,” Economist Intelligence Unit, p. 4.
16 “Morocco—Economy,” Economist Intelligence Unit, via EIU database, accessed March 2017.
17 Economist Intelligence Unit Country Data via EIU database, accessed March 2017.
18 “Morocco—Overview,” The World Bank website.
19 “Morocco—Overview,” The World Bank website.
20 “Morocco,” CIA World Factbook.
21 Chauffour, “Morocco 2040—Emerging by Investing in Intangible Capital,” p. 47.
22 “Morocco Trade at a Glance: Most Recent Values,” World Bank website,
http://wits.worldbank.org/CountrySnapshot/en/MAR/textview, accessed March 2017.
23 “Morocco,” CIA World Factbook.
24 Conor Gaffey, “Why Has Morocco Rejoined the African Union after 33 Years?,” Newsweek website, February 2, 2017,
http://www.newsweek.com/morocco-african-union-western-sahara-551783, accessed March 2017.
25 Gaffey, “Why Has Morocco Rejoined the African Union after 33 Years?”
26 Chauffour, “Morocco 2040—Emerging by Investing in Intangible Capital,” pp. 24, 38.
27 Arthur Nelsen, “Morocco to switch on first phase of world’s largest solar plant,” The Guardian, February 4, 2016
https://www.theguardian.com/environment/2016/feb/04/morocco-to-switch-on-first-phase-of-worlds-largest-solar-plant,
accessed October 2017.
28 “The Report: Morocco 2016,” Oxford Business Group, https://www.oxfordbusinessgroup.com/overview/better-linksinvestment-remains-strong-range-projects-addressing-need-upgrades, accessed October 2017.
36
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29 Ted Thornhill, “Tests begin for ‘fastest train in Africa’: 200mph Moroccan TGV set to slash journey times between
Casablanca and Tangier,” Dailymail UK, October 9, 2017, http://www.dailymail.co.uk/travel/travel_news/article4963908/Morocco-prepares-test-fastest-train-Africa.html, accessed October 2017.
30 Chauffour, “Morocco 2040—Emerging by Investing in Intangible Capital,” p. 21.
31 “Morocco,” CIA World Factbook; and “Morocco—Agricultural Land Area,” The World Bank website,
https://data.worldbank.org/indicator/AG.LND.AGRI.ZS?locations=MA, accessed October 2017.
32 “Morocco,” CIA World Factbook; “Morocco—Agriculture,” Export.gov website (International Trade Administration, U.S.
Department of Commerce), updated October 25, 2017, https://www.export.gov/article?id=Morocco-Agricultural-Sector,
accessed October 2017; and “Morocco,” MIT OEC Atlas, https://atlas.media.mit.edu/en/profile/country/mar/, accessed
November 2017.
33 “Morocco,” CIA World Factbook; and “Morocco—Agriculture,” Export.gov website.
34 “Morocco—Agriculture,” Export.gov website.
35 Economist Intelligence Unit Country Data via EIU database, accessed March 2017; and “Morocco—Agriculture,” Export.gov
website.
36 “Morocco—Water and Sanitation,” USAID website, updated June 15, 2017, https://www.usaid.gov/morocco/water-and-
sanitation, accessed October 2017.
37 “Morocco—Water and Sanitation,” USAID website.
38 “Morocco—Fertilizer consumption (kilograms per hectare of arable land,” The World Bank website,
https://data.worldbank.org/indicator/AG.CON.FERT.ZS?locations=MA, accessed October 2017.
39 Morocco Ministry of Culture and Communication, “Green Morocco Plan,” http://www.maroc.ma/en/content/green-
morocoo-plan, accessed April 2017.
40 Morocco Investment Development Age…